annual report flight catcher airlines

2014ANNUAL REPORT

Flight Catcher Airlines

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Table of content

Editorial............................................................................. .......... 4

Key Figures.................................................................................. 6

Report......................................................................................... 8

Annual Account............................................................................ 11

Cash flow Statement.................................................................... 16

EditorialMarisha van Huizen - Chief Executive Officer Flight Catcher Airlines

The Wisconsin’s air transport industry is expanding rapidly. Providing Flight Catcher Airlines with a lot of possibilities and opportunities. We are heading towards becoming Wisconsin’s biggest low budget airline company and we are proud of that!

Last year was a great year for Flight Catcher Airlines. We lowered our loans with 18.8%, while expanding the company. We expanded our fleets by 62.5% and we expanded our routes with 50%. These numbers are mostly responsible for the success of Flight Catcher Airlines. We are a young company and our goal for the past year was to create a growing but financial stable and healthy organization. We are proud to inform you that we have succeeded in achieving our goal.

For the coming year our goal is to keep growing. We want to become the biggest low budget airline company in Wisconsin’s so that our passengers can fly cheep wherever they are planning on traveling to. Besides that we also want to lower our loans even more to keep financially healthy and stable.

The last year we had an employee growth of 61.2%. We want to give them special thanks, because without our staff we would not be able to reach our goals and maintain the company. We also want to thank the share-holders for having faith in such a young company. We hope we did not disappoint you and we will promise you that next year will even be better.

Kind regards,

Marisha van HuizenCEO Flight Catcher Airlines

ResponsivenessWe want to be able to fully satisfy the needs of our customers as far as this corresponds with our strategy as an airline company. We fully realize that key tools here are being fast and flexible. The quicker will be the responds so the better will be output both for our customers and us.

ReliabilityWe want “reliability” as our personal motto that will lead us through the future hand in hand with our customers. We want to be reliable to meet the commitment made to the customers.

QualityWe understand that quality is always important even thou there are different levels of services. However, we want to create maximum quality for the level of our services in addition to satisfy the needs of our customers.

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Key Figures

The table above represents a display of the key finan-cial figures for Flight Catcher Airlines. The key figures were calculated for the analysis of a company’s ac-counting year and accounting performance. The table is a comparison stated between the quarters of year two as well as comparison between the end figures of year one and the second year quarters.

The final results can be compared – this will make it easier to see whether the accounting year has been good or bad to Flight Catcher Airlines.Clearly, when the end figures of year one are com-pared to the four quarters of year two it could be seen that the company was gaining profit increasing steadily its income.

Capital employed= total asset-total liabilityReturn on capital employed=ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employed

Capital employed= total asset-‐total liability Return on capital employed=ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employed The table above represents a display of the key financial figures for Flight Catcher Airlines. The key figures were calculated for the analysis of the company's accounting year and accounting performance. The table is a comparison between the quarters of year two and the end figures of year one.

With the help of the final results of year one, it makes it easier to see whether the second accounting year has been good or bad for Flight Catcher Airlines.

Clearly, when the end figures of year one are compared to the four quarters of year two it could be seen that the company was gaining profit and steadily increasing its income.

Currency -‐ Dollar QTR 1-‐4 QTR 5 QTR 6 QTR 7 QTR 8

Revenues 4,107,474 4,824,178 5,754,708 6,122,086 7,453,306 Expenses 3,636,431 3,722,975 4,704,840 4,678,416 6,240,432 Income from current operations 471,044 1,101,203 1,049,868 1,443,670 1,212,874 Profit for the period -‐451,507 471,785 118,399 511,895 301,897 Earnings per ordinary share (USD) -‐0.08 3.15 0.78 3.38 1.85 Equity Return on equity (%)

1,236,512 -‐0.010

1,708,297 0.276

1,876,696 0.063

2,388,592 0.214

3,190,490 0.095

Capital employed Return on capital employed (%)

1,236,512 0.380

1,708,297 0.644

1,876,697 0.559

2,388,593 0.604

3,190,490 0.380

Net-‐debt-‐to-‐equity ratio 3.881 2.750 2.326 1.685 1.221 Dividend per ordinary share (USD) 0 0 0 0 0 Cargo profit -‐10,765 9,763 10,315 14,367 14,919 Financial position Cash flow from operating activities Cash flow from investing activities Free cash flow

4,350,500 4,228,020 122,480

4,769,738 4,417,973 351,765

5,794,571 5,567,141 227,430

6,328,183 6,064,011 264,172

7,836,162 7,245,728 590,434

The situation of the concern

ServicesIn 2014 we have offered several services to our cus-tomers. The far most important service is the private air transport. In 2014 we established an average pas-senger load factor of 77,95%. We have flown 216.880 passengers to there, mostly, work and home destina-tions within Wisconsin for the lowest fairs of the re-gion with the widest choice of routes and flying times.

Besides the private market we have also invested in the cargo market. This additional service raised the total profit with $49.364, -. Our Cargo market is still growing, this shows in our cargo profit, which is in-creasing every month.

Development of the marketThe air transport market in Wisconsin is developing quickly. Competitors are growing and the demand for flights, destinations, flexible schedules and addition-al services is increasing. In 2014 Flight Catcher Air-lines has proven itself, by performing and operating well within this changing market, to be able to gain

more profit, more passengers, and by continuing the growth, to be able to profit from this quickly develop-ing market.

Realised investments

5 new lease contractsIn 2014 we have invested in 5 new lease contract. The choice for leasing was made on the following de-cisions: The 1ste of January 2014 our debt to equity ratio was 3.9. Our promise to our customers is that we are the cheapest airline with the widest choice in destinations and flights per day. To fulfil this promise we needed more planes but because of our loans we could not effort it to buy more. To keep maintaining a sound business management and to fulfil our prom-ise to the customer we have decided to start leasing planes and to lower the depth with the profits earned by these planes.

MarketingFor Flight Catcher Airlines marketing is very important and one of the highest costs. To maintain the high

Report

marketing level we needed to invest in 2014. Over-all the quarterly marketing budget is increased with $39.999, - and the cargo-marketing budget with $30.000, -. The investment shows its results in the financial figures at the end of the book year, in the profit of the cargo marketing and in the increase of passengers.

Local community causesFlight Catcher Airlines has stated to return 2% of the profit to the local community of Wisconsin. In 2014 we have donated an amount of $19.050, - to the fol-lowing charities; environmental causes, health and family care issues and local community causes. We started this project at the moment that the profit was high enough to compensate the loss of 2013.

Personnel In 2014 our workforce had grown by 61.2%. This re-quired a different approach and a high level of coach-ing to remain our quality and service. Therefor we have increased the training and quality budget with $28.000, -. Because of this decision the overall qual-ity level of our airline went from 62 to 80 and our re-liability went from 93.4 to 98.3. Besides the increase of the quality and training budget we also have granted all our em-ployees with 2% compensation above their prevailing wage.

Future of the company

Private passengersIt is our mission to stay the logical choice for our cus-tomers within Wisconsin. To do so we will keep on fly-ing with more plains, on more routes, and on a more flexible time schedule then our competitors. Our plan-ning will stay flexible and the quality and maintenance on the same level for every fleet and every route. Our passengers know what to expect from us and flying Flying Flight Catcher Airlines will not be disappointing. We will keep offering all of this for the lowest fairs with-in the Wisconsin region. Go Forward, catch our flight!

Cargo marketingCargo marketing is an additional service that we pro-vide for our customers within the local Wisconsin mar-ket. Cargo marketing has proven to be very profitable for Flight Catcher Airlines. In 2015 we want to double our cargo profit, by raising the amount of routes, des-tinations, flying time and cargo marketing budget.

Transfer flights outside of WisconsinIn 2015 we will start offering transfer flights from the small local hubs to Madison Airport. The transfers will be inline with the most popular departures through-out America. With this service we will create an easy hop on and hop off service for our passengers while traveling further to their business destination. For this service we will cooperate with a national airline.

Financing in the futureOur goal for 2016 is to increase our fleet and differ our routes even more. We will bring down our debt to equity ratio to the average ratio of our local airline in-dustry or even lower. While achieving our goals Flight Catcher Airlines will become an expanding but finan-cial healthy, stable and independent company.

Organizational chart

PersonnelTo keep on growing our workforce needs to grow as well. At this point our employee turnover is high. This number needs to be lowered in 2015. To achieve this goal we need to raise our quality and training budget. While the company is growing we also need to con-sider that the allowance that we provide our person-nel with needs to grow as well. Besides the financial part we also want to invest in a code of conduct to meet up with the ethical principles of Flight Catcher Airlines. To show the personnel our gratitude towards them we will launch an annual December party. This party will be for the entire company from the cleaning service to our pilots.

Annual account

Annual account

1) Balance sheets 2014


Balance sheet January 1, 2014

Debit Credit

Aircraft Cost 6.500.000 Common Stock 1.500.000

Less Depreciation -‐1.255.000 Retained Earnings -‐263.488

Net aircraft 5.245.000 Total Equity 1.236.512

Facilities/

Equipment -‐ Net 80.000 Long-‐term Loans 4.276.777

Total Fixed Assets 5.325.000 Total Fixed Liabilities 4.276.777

Cash 122.478 Acc. Payable 1.055.304

Short-‐term inv. -‐ Short-‐term Loans 521.875

Acc. Receivable 1.642.990 Total Current Liabilities 1.577.179

Total Current Assets 1.765.468

Total Assets 7.090.468 Total Liabilities & Equity

7.090.468


Balance sheet December 31, 2014

Debit Credit

Aircraft Cost 6.500.000 Common Stock 2.050.000

Less Depreciation -‐1.710.000 Retained Earnings 1.140.490

Net aircraft 4.790.000 Total Equity 3.190.490

Facilities/

Equipment -‐ Net 60.000 Long-‐term Loans 3.894.765

Total Fixed Assets 4.850.000 Total Fixed Liabilities 3.894.765

Cash 590.438 Acc. Payable 1.836.505

Short-‐term inv. 500.000 Short-‐term Loans -‐

Acc. Receivable 2.981.322 Total Current Liabilities 1.836.505

Total Current Assets 4.071.760

Total Assets 8.921.760 Total Liabilities & Equity

8.921.760

Explanation balance sheets 2014As is logic, our ‘Net Aircraft’ has decreased, this is due to depreciation. Our ‘Cash’ has increased almost five times. It wasn’t suspected that Flight Catcher Airlines would have so much revenue, which is why they haven’t foreseen the huge increase of cash over that quarter. In the end of the year 2014, Flight Catcher Airlines was doing so good that they were able to invest half a million. This is also one of the measurements they took to pre-vent that their cash would be too high again. The ‘Ac-counts Receivable’ increased with more than a million as well, which means that the demand of their service has been increasing. Due to growth, Flight Catcher Airlines was able to sell stock at a reasonable price. That is why ‘Common Stock’ has increased with $ 550.000 over the year 2014. One of the results of doing great business is the huge increase in ‘Retained Earnings’, which has gone from - $ 263.488 to 1.140.490. Taking that into account, ‘Total Equity’ almost tripled. During the year 2014, Flight Catcher Airlines was able to pay of almost 9% of their ‘Long-term Loan’, which states that their company is getting healthier.The ‘Accounts Payable’ have increased with around $ 800.000, which is a small amount of money com-pared with the increase of ‘Total Equity’. The ‘Short-term Loan’ has been paid back completely, which also means that the company is getting healthier. Overall, the company Flight Catcher Airlines has grown a lot during the year 2014. They have become a lot more healthy, but still need to pay back a big part of their long-term loan.

Flight Catcher Airlines Income Statement 2014

Gross Revenue 24.154.278

100.0%

− Commissions 2.050.463

8.5% − Refunds 1.015.063

4.2%

+ Interest Income

7.500

0.0% Net Revenue

21.096.252 87.3%

Flight Operations 4.036.216

16.7% Fuel 3.844.524

15.9%

Maintenance 3.548.423

14.7% Passenger Service 2.747.747

11.4%

Cabin/Food Service -‐

0.0%

Insurance

280.440

1.2%

Marketing Expenses

692.999

2.9%

Add. Employee Compensation

50.400

0.2%

Quality and Training

72.000

0.3%

Hiring/On-‐Job-‐Training Costs

222.000

0.9%

Social Performance Budget

13.012

0.1%

Market Research Cost

38.000

0.2%

Interest Expense

385.903

1.6% Lease Payment 1.680.000

7.0%

Administrative Exp 1.250.000

5.2%

Depreciation

475.000

2.0%

Other Expense

10.000

0.0% Total Operating Expense

19.346.663 80.1%

Operating Profit/Loss

1.749.589 7.2%

Net Cargo Profit

49.364

0.2%

Other Income

240.000

1.0% Profit Before Tax

2.038.953 8.4%

Less Income Tax (40%)

634.977

2.6%

Net Profit

1.403.976 5.8%

Dividends Paid

-‐ 0.00/sh

Explanation Income Statement 2014The income statement of a company measures the financial performance over a specific accounting pe-riod. Giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities and assesses the finan-cial performance. It also shows the net profit or loss incurred over a specific period of time, typically over a fiscal quarter or year.As mentioned at the balance sheets, there has been an explosive growth in Flight Catcher Airlines; this growth was responsible for a cash overflow that could have been solved by for example paying dividend.The numbers above shows the steps that Flight Catch-er Airlines has taken in their development to generate satisfying numbers. The slow but significant success of the company could be easily spotted trough the financial statements in this report. These results are particularly pleasing given the ups and downs that the company had in its beginning. The company’s reve-nue was $ 24.154.278 for the year 2014. The compa-ny proudly presents that the Social Performance Bud-get has reached $ 13.012. The cargo profit went up to $ 49.364. On the other hand, expenses remain low showing that the ‘cutting-costs’ system was working.This progress the company made, combined with strong underlying cash flows, visibility of earnings and a strong financial position has allowed Flight Catch-er Airlines to grow successfully and at the same time make sure to continue being sufficiently flexible at in-vesting for future growth.

cash flow statementCash Flow Statement

Flight Catcher Airlines Cash Flow Statement 2014

Profit before taxation

2.038.953

Depreciation expense 475.000

Interest expense 385.903

Increase receivables 1.338.332

Increase payables 781.201

Taxation paid -634.977

Cash Flow from Operating

Activities 4.384.412

Proceeds share issue

550.000

Repayments (mortgage) loan -382.012

Cash flow from financing activities

167.988

Change in Cash and Cash Equivalents

4.552.400